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By Jeffrey
Cane | Thursday, July 29 Onward? There’s
always a danger in reading too much into a single session, especially on what
was the sleepiest trading day in a week, but there were developments to
give stock market bulls confidence today. First,
investors overlooked a disappointing headline number on second-quarter U.S.
economic growth, choosing to focus instead on signs in the report that
consumer spending remains strong. They also shrugged off weekly jobless
numbers that missed Wall Street’s consensus. And the poorly received initial
public offering of Robinhood
Markets did not discourage buying elsewhere in the
market. Signs of
momentum on an infrastructure spending bill were encouraging, as were a broad
spectrum of robust second-quarter earnings reports. Ford
Motor ended up
3.8%, Qualcomm rose 6%,
Yum! Brands gained more than 6% The misses
on the economic data were also positive for stocks in that that they support
a narrative that the Federal Reserve will continue to support the economy for
a while longer. As Lisa
Beilfuss noted on
Barrons.com: The
softer-than-expected GDP report, together with disappointing data on claims
for unemployment benefits Thursday, puts some firepower behind Federal
Reserve Chairman Jerome
Powell’s comments Wednesday that
the labor market still has a ways to go before it is recovered, says Mike
Loewengart, managing director of
investment strategy at E*Trade Financial. The slowdown in the improvement in
jobless claims emphasizes the weakness in employment, while the GDP miss puts
a finer point on the fact that growth may be stalling, he says. The S&P
500 closed up 0.4%, for its second highest close
on record. Nine of its 11 sectors ended in positive territory. The Dow
Jones Industrial Average was up 0.4%, while the Nasdaq
Composite edged up 0.1%. Gold rose 0.8%, to $1,831.20 an ounce, its
sharpest percentage gain since May 6. Bitcoin, less often
mentioned as an “alternative” to gold these days, fell below $40, 000,
although it's still up 14.9% so far for the month. Crude
oil, meanwhile, advanced 1.7%, to $73.62 a
barrel. After the
market close today, Amazon.com reported sales that missed expectations, and
the stock was down 7% in after-hours trading. The
miss, says Barron’s Eric J.
Savitz “reflects a shortfall in Amazon’s e-commerce
business, which suffered a sharp deceleration from recent growth trends.” That report
came a day after Facebook put up consensus-beating numbers, yet
saw its shares fall 4% today. Further gains in stocks may be
tested tomorrow if disappointment over Amazon spills over
elsewhere. |
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DJIA:
+0.44% to 35,084.53 The Hot
Stock: Align Technology
+8.9% Best Sector:
Consumer Discretionary +1.1% |
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